Core Viewpoint - The liquor industry is facing sales pressure, with significant short-term performance decline for Zhenjiu and Lidu, as they focus on market relief and inventory control [1][2] Group 1: Financial Performance - Zhenjiu and Lidu expect revenue for the first half of 2025 to be between 2.4 billion to 2.55 billion yuan, representing a year-on-year decline of 38.3% to 41.9% [1] - Expected net profit attributable to shareholders is projected to decrease by 23% to 24%, with adjusted net profit (non-IFRS) anticipated to decline by 39% to 40% [1] Group 2: Market Challenges - The decline in liquor consumption is attributed to economic uncertainties and recent policy impacts, particularly affecting business banquets, social gatherings, and gift-giving scenarios [1] - The high-end product segment, particularly Zhen30 and above, is impacted by downward price adjustments in premium liquor, leading to a focus on volume control and price stabilization [1] Group 3: Strategic Initiatives - The company plans to launch a new flagship product, Dazhen, in June 2025, targeting a market gap between Zhen15 and Zhen30, with positive sales progress expected [2] - The chairman is actively promoting the brand through personal marketing efforts on social media platforms [2] - The company aims to enhance its existing flagship products' competitive edge through refined sales strategies and increased market penetration [2] Group 4: Product Expansion - A high-end beer brand named "Niushi" is set to launch on August 8, with the first product priced at 88 yuan per 375ml aluminum bottle [2] - The company is focusing on emerging consumer trends and plans to develop products tailored for specific occasions like birthdays and weddings [2] Group 5: Long-term Growth Potential - The company is recognized as a rare listed entity in the liquor sector, with strong operational momentum and significant future growth potential [2] - Zhenjiu is positioned in the second tier of the liquor market, with opportunities to leverage brand and channel advantages in a concentrated market [2] - Lidu is seen as a rising star in the high-end segment, with innovative marketing strategies enhancing its market presence [2]

Core Insights - The Chinese liquor industry is currently facing significant challenges due to a combination of policy adjustments, changes in consumer behavior, and intense competition, leading to decreased demand, falling prices, weakened consumption scenarios, and high inventory levels [1] - Many listed liquor companies have reported poor performance in the first quarter, with notable declines in revenue and profits [1][2] Industry Performance - Six A-share liquor companies have issued profit warnings for the first half of the year, with Water Well expected to see a revenue decline of 12.84% and a net profit drop of 56.52%, while other companies like Jiu Gui and Huang Tai are also experiencing significant losses [1] - The overall performance of the liquor industry is undergoing a phase of adjustment, which is seen as a natural response to the current market pressures [3] Resilience and Recovery - The liquor industry has historically shown resilience and the ability to recover from downturns, with companies that survive downturns often reaching new heights in subsequent cycles [5] - Companies with strong fundamentals, such as Zhen Jiu Li Du, are expected to perform better during this adjustment period due to their stable market position and proactive strategies [7] Strategic Innovations - Zhen Jiu Li Du is adapting to market changes by launching products that offer high quality at competitive prices, such as the "Da Zhen・Zhen Jiu," which targets consumers seeking value [9] - The company is also reforming its distribution channels by collaborating with high-quality distributors and exploring new sales avenues, including corporate group purchases and cross-industry partnerships [9] Market Outlook - The global capital market is experiencing volatility, but there is optimism for recovery, with significant gains in major indices since April [10] - The liquor sector is currently undervalued, with a low fund holding ratio and attractive dividend yields, making it a potential target for investment as market conditions improve [11][14] Investment Appeal - Zhen Jiu Li Du's current valuation is competitive compared to leading A-share liquor companies, and its strong cash flow and dividend history enhance its attractiveness to investors [15] - The combination of low valuation and resilient performance positions Zhen Jiu Li Du favorably in a turbulent market, likely attracting more investment [15][17] Conclusion - Despite current challenges, the liquor industry is expected to rebound as economic conditions improve and consumer confidence returns, with Zhen Jiu Li Du positioned to lead this recovery [16][17]

Core Viewpoint - The recent decline in Kweichow Moutai's stock price has raised concerns, with a drop of nearly 13% from its peak of 1645 CNY per share to 1427 CNY, significantly underperforming the Shanghai Composite Index [1][3][4] Group 1: Stock Performance - Kweichow Moutai's stock has been in a weak downward trend for over four years since reaching a historical high of 2400 CNY in early 2021, with a decline of more than 40% from that peak [3][4] - The overall performance of the liquor sector has been poor, with Kweichow Moutai and other leading liquor companies experiencing significant declines in stock prices, with Moutai down 12.56% over the past 20 trading days [10][11] Group 2: Policy Impact - A new regulation effective from May 18, 2025, prohibits the serving of liquor at official meals for civil servants, which has drastically changed market expectations for future liquor consumption [6][7] - Despite a reduced reliance on government consumption, the loss of this segment is expected to impact broader business and social dining scenarios [8][9] Group 3: Market Dynamics - The liquor industry is facing a contraction in consumption scenarios, exacerbated by the new regulations, leading to a significant drop in wholesale sales [10][12] - Kweichow Moutai's wholesale prices have been declining, with the price for a case dropping to 2025 CNY and for individual bottles to 1960 CNY, marking a decline of over 12% compared to earlier this year [14][16] Group 4: Inventory and Supply - Current inventory levels for Kweichow Moutai are substantial, with approximately 120 million bottles in circulation and production capacity expected to add another 130 million bottles, indicating a potential oversupply [17] - Reports indicate that the liquor wholesale price index has been below 100 since last year, with a 12.5% year-on-year decline in production as of March [18][20] Group 5: Consumer Trends - The younger generation shows a declining interest in traditional liquor, with only 13% of young consumers preferring liquor over other beverages, leading to a significant generational gap in consumption [26][30] - New consumption trends favor lighter beverages and experiences, with younger consumers increasingly gravitating towards products that align with their lifestyle preferences [28][29] Group 6: Industry Evolution - The liquor industry has matured over the past two decades, transitioning through various phases, and is now characterized by a strong competitive landscape [24][25] - Despite attempts by liquor companies to innovate and adapt, such as Kweichow Moutai's forays into cross-industry products, these efforts have not gained significant traction [31][32]

Core Viewpoint - The 2024 annual shareholders' meeting of Kweichow Moutai showcased strong investor engagement and management's commitment to navigating the current adjustment cycle in the liquor industry while maintaining growth and profitability [1][3]. Group 1: Shareholder Engagement - Over 1,400 shareholders attended the meeting, leading to a venue change due to high registration numbers, reflecting strong loyalty among long-term investors [1]. - Management adopted a welcoming approach, treating shareholders like family, with dedicated transport and hospitality services [1]. - The management team, including Chairman Zhang Deqin, actively engaged with shareholders, expressing gratitude and addressing their concerns [1][3]. Group 2: Financial Performance - Kweichow Moutai reported a total revenue of 174.144 billion yuan and a net profit of 86.228 billion yuan for 2024, achieving over 15% growth and setting new historical records [3]. - The company’s dividend distribution plan was overwhelmingly approved, with a cash dividend of 276.24 yuan per 10 shares, totaling approximately 34.671 billion yuan [10]. Group 3: Strategic Outlook - Management emphasized the importance of maintaining confidence and resilience to navigate the current liquor industry cycle, citing past successes in overcoming challenges [6][7]. - The company plans to enhance its marketing strategies and focus on internationalization and youth engagement as part of its medium- to long-term strategies [8][9]. - Kweichow Moutai aims to build a more resilient ecosystem by understanding stakeholder needs and fostering a collaborative environment [9]. Group 4: Shareholder Returns and Value Creation - Kweichow Moutai has implemented a share buyback program, with plans to repurchase shares worth up to 6 billion yuan, having already completed a significant portion of this plan [12]. - The company’s commitment to value creation is evident in its consistent dividend increases and share repurchase initiatives, reinforcing investor confidence [10][12].

Core Viewpoint - Guizhou Moutai has demonstrated strong performance in 2024, achieving all core indicators above the initial target of approximately 15% growth, despite challenges in the broader liquor industry [3][7]. Financial Performance - In 2024, Guizhou Moutai reported total revenue of 174.14 billion yuan, a year-on-year increase of approximately 15.66%, and a net profit of about 86.23 billion yuan, up 15.38% [7]. - For Q1 2025, the company achieved total revenue of 51.44 billion yuan, reflecting a year-on-year growth of 10.67%, and a net profit of 26.85 billion yuan, up 11.56% [7]. - The cash flow from operating activities reached 92.46 billion yuan, marking a 38.85% increase [14]. Industry Context - The liquor market is currently facing increased competition and a shift to a stock competition phase, with 8 out of 24 listed liquor companies experiencing revenue declines in 2024 [8]. - Despite the challenges, the fundamental demand for liquor remains, providing a basis for future growth in the industry [9]. Strategic Insights - Chairman Zhang Deqin emphasized three beliefs regarding the liquor industry: confidence in Moutai's quality and culture, belief in its innovation and adaptability, and trust in its service capabilities [8]. - The company is transitioning from a focus on scale to prioritizing quality, adapting to changing consumer behaviors and market conditions [9]. Product and Market Development - Moutai's flagship product continues to be a strong revenue driver, with revenue from Moutai liquor reaching 145.93 billion yuan, a 15.28% increase, while the Moutai 1935 series generated over 24.6 billion yuan, growing 19.65% [13]. - The company is implementing a three-step internationalization strategy, with overseas revenue surpassing 5.19 billion yuan in 2024 [18]. Management and Governance - Zhang Deqin's leadership has been characterized by practical approaches to market changes, focusing on consumer demographics and service enhancements [11]. - The management team is committed to maintaining a strong brand identity and quality standards, which are seen as essential for navigating current market challenges [17].